2018 (6) TMI 205 - AT - Customs

Import of unused goods - Secondary Second Choice Carbon Steel Pipes in Mix Size Mix Thickness - restricted item or not? - no Confiscation - Redemption fine - penalty - Held that - In terms of FTP Policy the restriction was in respect of all second hand goods, except second hand capital goods are restricted for import and are allowed to be imported only in accordance with provisions of FTP, ITC (HS), HBPV1, Public notice or an authorization issued in this regard. The second grade pipes cannot be termed as second hand as the pipes had remained unused. Appeal dismissed - decided against Revenue.

Summary

Issues:
1. Import of second-hand goods under FTP Policy.
2. Misdescription and mis-declaration of imported goods.
3. Examination of test certificates and supporting documents.
4. Imposition of redemption fine and penalties.

Analysis:
1. The appeal was filed by the Revenue against the Commissioner of Customs' order regarding the import of "Secondary Second Choice Carbon Steel Pipes." The goods were reported as old and used, falling under restrictions for imports as per the FTP 2004-09. The importer claimed the pipes were unused, supported by a letter from the supplier. The adjudicating authority agreed with the importer, stating the goods were not used and allowed the importation.

2. The Revenue argued that the goods were second-hand and misdescribed, urging reexamination or testing by an expert. They criticized the reliance on the supplier's letter and lack of examination of the manufacturer's test certificate. The Revenue sought redemption fine, penalties under Customs Act sections, and personal penalty on a company official.

3. The Tribunal found the adjudicating authority's findings satisfactory, noting the restriction on second-hand goods under the FTP Policy. The authority determined the imported goods were unused after manufacturing, failed hydrostatic tests, and were termed "Secondary Second Choice Carbon Steel." The Tribunal agreed that the pipes were not second-hand and had not been seized, precluding the imposition of fines or penalties. No penalty was warranted for the company official due to the absence of a show cause notice or evidence of malafide intentions.

4. The Tribunal upheld the original order, rejecting the Revenue's appeal on both merit and legal grounds. The judgment was pronounced on 25/05/2018 by the Tribunal.